What is the Low Emissions Vehicle Contestable Fund?

In light of National Drive Electric Week happening this month we thought we’d talk about how businesses can access funding for their electric vehicle ventures.

Round five of the $7m-a-year Low Emissions Vehicle Contestable Fund closed on September 19th . But fear not, round six opens in early 2019 and with it a chance to net some funding to aid NZ’s environmental transition. We thought we’d dive in to what the Fund could go towards going forward, given its focus on promoting low emission vehicle use in New Zealand.

The Low Emissions Vehicle Contestable Fund (LEVCF) is a tool the government is employing to encourage the uptake of electric vehicles in New Zealand. The Fund is administered by the Energy Efficiency and Conservation Authority (EECA). We’ve decided to shine a spotlight on the Fund to increase visibility and draw your attention to a unique funding pool available to businesses.

Getting the niggly details out of the way

A few key points to note about the Low Emissions Contestable Fund.

a) They won’t bankroll everything – the Fund will only cover a maximum of half the cost of a project.

b) Per project funding is generally restricted to $500,000, although there are some exceptions [1] .

But that’s still a hefty amount of funding to kickstart a venture into providing electric vehicle fleet or setting up charging infrastructure, for example.

What is the Fund for?

The main thing EECA requires is that the projects:

encourage and support the uptake of electric vehicles
and other low emission vehicles (eg. plug-in hybrids)

are on roads used by the public (ie. not for hydrogen-fuelled trains)

ANDmake use of New Zealand’s renewable electricity advantage (charge up from the national grid).

I would be remiss not to mention that this was the initial definition of what the Fund could be used for. Because the definition was sufficiently vague to start with, the EECA have since refined the scope down to a few key points – still holding true to the above core sentiment.

More specifically

Applicants for the Fund must come up with projects that either increase the number of low emissions vehicles available, increase demand for low emissions vehicles, improve the availability of charging infrastructure or vehicle servicing, or develop innovative products or systems that take advantage of electric vehicle use.

In short, if you’re thinking about becoming a provider, a user, or someone involved in servicing electric vehicles, this Fund could be for you.

What has the Fund been used for so far?

The largest share of funding has been used for installing charging infrastructure. This infrastructure has been installed both around the country (often via ChargeNetNZ) or at the offices of the companies who have been granted funding to set up chargers at their offices (eg. Fisher and Paykel Healthcare).

Following charging infrastructure, the next largest use of the Fund has paid for low emissions heavy vehicles, often electrifying busses in Auckland and Wellington.

Table 1. LEVCF funding by project type

Project type

Amount

Charging infrastructure

$ 5,556,032

Heavy vehicles

$ 2,919,599

Vans

$ 1,672,696

EV demonstration

$ 1,042,760

Car share

$ 1,000,000

Light vehicles

$ 650,755

Vehicle conversion to LEV

$ 500,000

Car rental

$ 190,939

Qualifications development

$ 95,000

EV battery demonstration

$ 23,100

Why so few electric cars?

Although increasing charging infrastructure is key to widespread adoption of electric vehicles in New Zealand, I am surprised by the smaller share of funding going towards projects that directly provide electric cars. One of the Fund’s core objectives is to encourage electric vehicle use by New Zealanders at large. Given that we mostly get around in cars, I’m surprised to not see more projects going ahead that will directly increase the number of electric vehicles on roads.

Previous projects give some ideas

Scrolling through the above list already gives several ideas on how others can employ the Low Emissions Vehicle Contestable Fund at their organisation.

Install a charging station at your business

Convert your own business fleet to electric

Electrify your rental car fleet

Introduce electric vehicles into your lease vehicle fleet

Fund mechanics to attend EV maintenance training courses

Use the Fund as a council to install charging stations at logistically favourable locations

The list of already-funded projects also highlights opportunities where select groups could make effective use of the funding.

Areas that are missing out

In categorising the locations of LEVCF projects, I noticed that most of the funding so far has gone towards some key areas. Grouping the projects by the primary areas targeted shows that most of the funding went to Wellington.

Table 2. LEVCF share of funding by region

Region

Share

Wellington Region

18.9%

Auckland

15.7%

Waikato Region

9.4%

Canterbury Region

7.2%

Manawatū-Whanganui Region

6.6%

Otago Region

3.9%

Gisborne Region

3.3%

Bay of Plenty Region

1.8%

Southland Region

1.7%

Northland Region

1.3%

Hawke’s Bay Region

0.8%

Taranaki Region

0.7%

Marlborough Region

0.1%

Nationwide

28.5%

It’s also important to highlight that in the case of Wellington, most of the funding went towards projects located in Wellington City. In contrast, projects in the Waikato region were widespread throughout the region, with fast chargers being installed in Ōtorohanga, Taupō, and Thames-Coromandel.

Furthermore, the list of regions receiving funding does have some holes. So far, no funding has directly gone to the West Coast, Nelson, or Tasman regions, and relatively little funding has been directed towards Auckland, given its size.

On a journey to a low-carbon future

No matter your business, if you’re looking at growing your electric vehicle fleet, or want to attract customers with convenient charging facilities, the Low Emissions Vehicle Contestable Fund is a way to halve the costs of making this happen.

Those interested in the Fund should head to EECA’s website for more information and to start an application. If you are interested in making a LEVCF pitch and would like to discuss supporting material for proposals, please get in touch with Mieke Welvaert (miekew@infometrics.co.nz).

[1] Proposals for more than this amount will be considered in exceptional circumstances only if the project is likely to demonstrate significant public benefits resulting in outstanding value for money; and the project cannot be scaled down without significantly affecting the project’s objectives, viability or value for money; and the applicant contributes greater than 50% co-funding.